Pex4p is an ubiquitin-conjugating enzyme that functions at a late stage of peroxisomal matrix protein import. Here we show that in the methylotrophic yeast Hansenula polymorpha production of a mutant form of ubiquitin (Ub(K48R)) has a dramatic effect on PTS1 matrix protein import. This effect was not observed in cells lacking Pex4p, in which the peroxisome biogenesis defect was largely suppressed. These findings provide the first indication that the function of Pex4p in matrix protein import involves polyubiquitination. We also demonstrate that the production of Ub(K48R) in H. polymorpha results in enhanced Pex5p degradation. A similar observation was made in cells in which the PEX4 gene was deleted. We demonstrate that in both strains Pex5p degradation was due to ubiquitination and subsequent degradation by the proteasome. This process appeared to be dependent on a conserved lysine residue in the N-terminus of Pex5p (Lys21) and was prevented in a Pex5p(K21R) mutant. We speculate that the degradation of Pex5p by the proteasome is important to remove receptor molecules that are stuck at a late stage of the Pex5p-mediated protein import pathway.